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Just recently, the finance minister, Rachel Reeves, presented a Labour budget. The public have been calling for Labour’s mission and principles to be more distinctly articulated. Through the decisions made – a transition to a fairer tax system, focusing on wealth to pay for tackling child poverty, quality public services and the cost of living – we have clearly set out what we stand for.

That’s why Labour MPs applauded in the Commons, and it’s why we are ready for the battles to come. And it’s why the cries from the right began right away.

The Central Political Divide in British Politics

The central division in British politics is yet again on the economy. On the one side Labour, who want to change it so it benefits ordinary working people, and on the other, our opponents, who support the status quo and the failed doctrine of the past. We must now confront, and prevail in, the debate.

The Tories had 14 years to fix things and in reality, by every standard, they got far more dire. Their ideological austerity and trickle-down economics – tax breaks for the wealthy, reducing investment (causing us with poor productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Legacy of Decline Under the Previous Government

Quality of life fell by the biggest amount since records began, child poverty hit record levels, NHS waiting lists in England were the highest they’ve ever been, wages remained flat, a housing crisis took hold, young people affected by Covid were left on the scrapheap. The history of failure continues.

A single budget alone can’t put all this right, so Labour has a long-term plan for rebuilding and for rewiring the country. And we have to go out and keep making the argument for why our approach will yield benefits.

Social Security and Youth Deprivation

Under the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to manage the symptoms instead of the solution.

It’s why we are constructing more affordable homes than for a generation, increasing wages and enhanced protections for workers, greatly increasing investment in infrastructure and new industries, getting waiting lists down and bringing down the costs of childcare and energy as we drive for clean power.

Removing the Two-Child Limit

It’s also why we are absolutely right to use this budget to remove the two-child benefit cap.

For almost a decade, since it was introduced, poorer families with children have suffered from a unjust social experiment that was marketed as fair for working people when it was anything but. Most of the families affected by it have a parent in work.

It has only served to push 300,000 more children into poverty – which, ultimately, costs us more, as well as being callous and unethical.

Real Impact in Communities

From experience from my own district – where over 5,000 children will be raised out of poverty as a result of abolishing the cap – the real impact it’s had. Children wearing £1 wellies as school shoes, children going to bed hungry and cold, living in cramped, mouldy homes, parents this Christmas relying on food banks for a modest meal or small gift for their kids.

I also see the impact on schools, teachers, social workers, doctors and charities who are already overburdened but have to redirect time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Consequences of Child Poverty

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This predisposes them for the challenges they face throughout their lives: missed potential, financial struggles and ill health. Children who were raised in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a moral imperative, it is a long-term investment. Poverty costs the economy far, far more than the three billion pound cost of lifting the two-child cap, or expanding free school meals.

This is the reason we acted urgently in the budget, despite the challenging economic context. Every day with this cap in place sees over a hundred extra children pushed into poverty. The effects of lifting it won’t happen overnight either, so acting early in the parliament was crucial.

The cap was a symbol to 14 years of failed conservative ideology. Now it is gone.

Equitable Funding for Measures

We, as Labour, can also be clear that these measures are being funded in a just way – from a new gaming tax, eliminating tax loopholes and a new “mansion tax”.

Final Thoughts

Equity and direction – that’s how we will succeed in the contest of ideas. This budget is a clear statement that we won the election as Labour, and will lead as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political megaphone and set the agenda more strongly about what’s really wrong with the country and how we are repairing it. We’ve definitely done that this week.

So let’s keep hold of it and prevail in this struggle about how we will rebuild Britain and address the deep inequalities holding us back.